TIDMVGM
RNS Number : 9224Q
Vatukoula Gold Mines PLC
21 October 2013
21 October 2013
Vatukoula Gold Mines plc
("Vatukoula" or "the Company")
Update on US$40 million Investment Agreement
Vatukoula Gold Mines plc, the AIM listed gold producer focused
on Fiji, is pleased to announce the completion of the first tranche
of the equity funding under the US$ 40 million investment agreement
with Zhongrun International Mining Co. Ltd ("Zhongrun")
("Investment Agreement"). This initial investment of $10 million
will allow the Company to focus efforts on optimising the
operations and increasing production in the medium term. The
investment by Zhongrun is part of a long term strategy to
reposition the Company and assist the mine in achieving its long
term production targets of in excess of 100,000 ounces per annum.
Management expect to be at pro rata production rate of 100,000
ounces per annum in approximately 18 months from completion of the
US$ 40 million funding.
Under the US$ 40 million Investment Agreement US$10 million of
equity was completed today with the next US$10 million of equity
anticipated to be completed at the end of October and the US$ 20
million of secured loan notes to be completed by the end of January
2014.
David Paxton, CEO of Vatukoula Gold Mines, commented:
"The Completion of the first tranche of US$40 million Investment
Agreement is a significant milestone in the development of the
Vatukoula Gold Mine. With these funds and the remaining US$30
million due in the coming months the mine can embark on its capital
expansion plans to both increase the grade and tonnage from
underground mining operations. Based on current mine plans and
costs, I believe, that we will be able to achieve our long term
production targets at a cost of below US$900 per ounce"
Under the Investment Agreement the funding was to be provided in
two tranches of approximately US$ 20 million each. Subsequent to
this the Company has agreed with Zhongrun to complete the first
tranche via the issue of two tranches of equity instead of one as
originally contemplated. The first of which completed today has
been be provided by the issue by the Company of 90,000,000 new
ordinary shares at a subscription price of 6.89 pence per share
("First Tranche of Equity Funding"), which has raised gross
proceeds of approximately GBP6.2 million (US$ 10 million). The
second tranche of the equity funding is to be to be provided by the
issue by the Company of 98,897,000 new ordinary shares at a
subscription price of 6.89 pence per share ("Second Tranche of
Equity Funding"). This will raise gross proceeds of approximately
GBP6.8 million which is expected to complete at the end of October.
The remaining US$ 20 million will be provided by Zhongrun
subscribing for US$ 20 million of secured loan notes ("Loan Notes")
which is expected to complete by the end of January 2014.
Application will be made to AIM for the admission of 90,000,000
new ordinary shares of 5p each. The new ordinary shares rank pari
passu with the Company's existing issued ordinary shares, and
dealings are expected to commence on or around 25 October 2013.
Following admission of the 90,000,000 new ordinary shares, the
Company's enlarged issued share capital will comprise 246,358,339
ordinary shares. The Company hold no shares in treasury. Therefore
the total number of ordinary shares with voting rights is
246,358,339, which figure may be used by shareholders in the
Company as the denominator for calculations by which they will
determine if they are required to notify their interest in, or a
change in their interest in, the share capital of the Company under
the FCA's Disclosure and Transparency Rules.
Zhongrun currently holds 37,800,000 ordinary shares in the
Company and following the completion of the First Tranche of Equity
Funding will hold 127,800,000 ordinary shares, representing
approximately 52% of the enlarged share capital of the Company. On
completion of the Second Tranche of Equity Funding Zhongrun will
hold 226,697,000 ordinary shares, representing approximately 66% of
the enlarged share capital of the Company.
As previously announced as of 30 September 2013, as a
consequence of changes to the City Code on Takeovers and Mergers
(the "Code"), the Company is now subject to the Code. The Company
was not previously subject to the Code as it had previously been
able to rely on an exemption that, as its place of central
management and control was outside of the UK, the Code did not
apply. However following the amendment to the Code, for a UK
incorporated company with its shares admitted to Aim, this
exemption no longer applies in regard of central management and
control.
Brief details of the Panel, the Code and the protections they
afford are described at the end of this announcement.
As on completion Zhongrun will hold approximately 66% of the
voting rights of the Company, without a waiver of the obligations
under Rule 9 of the Code, Zhongrun would be required to make a Rule
9 Offer to acquire all of the Ordinary Shares not already owned by
it. The Panel has approved a waiver of the obligations of Zhongrun
to make a Rule 9 Offer without the requirement for the waiver to be
approved by independent shareholders at a general meeting following
receipt of written confirmations agreeing to such waiver given by
the shareholders holding, in aggregate, in excess of 50 per cent of
the shares of the Company capable of being voted at a general
meeting of independent shareholders.
Enquiries:
Vatukoula Gold Mines plc
David Paxton + 44 (0)20 7440 0643
Kiran Morzaria
W.H. Ireland Limited Pelham Bell Pottinger
James Joyce Charles Vivian + 44 (0)20 7861
James Bavister + 44 (0)20 7220 1666 Daniel Thöle 3232
The Takeover Code
The Code is issued and administered by the Panel. The Code
applies to all takeover and merger transactions, however effected,
where the offeree company is, amongst other things, a UK
incorporated listed or unlisted public company or a UK incorporated
company with its shares quoted on AIM (and to certain categories of
private limited companies). The Company is incorporated in the UK
and quoted on AIM and its Shareholders are entitled to the
protections afforded by the Code.
Under Rule 9 of the Code, where any person acquires, whether by
a series of transactions over a period of time or not, an interest
in shares which (taken together with shares already held by him and
an interest in shares held or acquired by persons acting in concert
with him) carry 30 per cent. or more of the voting rights of a
company which is subject to the Code, that person is normally
required to make a general offer to all the holders of any class of
equity share capital or other class of transferable securities
carrying voting rights in that company to acquire the balance of
their interests in the company.
Rule 9 of the Code also provides that, among other things, where
any person who, together with persons acting in concert with him,
is interested in shares which in aggregate carry not less than 30
per cent, but not more than 50 per cent. of the voting rights of a
company which is subject to the Code, and such person, or any
person acting in concert with him, acquires an additional interest
in shares which increases the percentage of shares carrying voting
rights in which he is interested, then such person is normally
required to make a general offer to all the holders of any class of
equity share capital or other class of transferable securities
carrying voting rights of that company to acquire the balance of
their interests in the company.
An offer under Rule 9 of the Code must be in cash (or with a
cash alternative) and at the highest price paid within the
preceding 12 months for any shares in the company by the person
required to make the offer or any person acting in concert with
him.
Under the Code, a concert party arises when persons who,
pursuant to an agreement or understanding (whether formal or
informal), co-operate through the acquisition by any of them of
shares in a company in order to obtain or consolidate control of
that company. Under the Code, control means an interest or interest
in shares carrying in aggregate 30 per cent. or more of the voting
rights of a company, irrespective of whether such interest or
interests give de facto control.
Rule 9 of the Code further provides, amongst other things, that
where any person who, together with persons acting in concert with
him holds over 50 per cent. of the voting rights of a company,
acquires an interest in shares which carry additional voting
rights, then they will not generally be required to make a general
offer to the other shareholders to acquire the balance of their
shares.
Pursuant to the issue of shares under the Investment Agreement,
Zhongrun will hold approximately 66 per cent. of the voting rights
of the Company. Without a waiver of the obligations under Rule 9 of
the Code, this would oblige Zhongrun to make a general offer to
Shareholders under Rule 9 of the Code.
Dispensation from General Offer
Under Note 1 on the Notes on the Dispensations from Rule 9 of
the Code, the Panel will normally waive the requirement for a Rule
9 Offer if, amongst other things, the shareholders of a company who
are independent of the person who would otherwise be required to
make an offer and any person acting in concert with him pass an
ordinary resolution on a poll at a general meeting approving such a
waiver. The Panel may waive the requirement for a resolution to be
considered at a general meeting (and for a circular to be prepared
in accordance with Section 4 of Appendix 1 to the Code) if
independent shareholders holding more than 50 per cent. of the
company's shares capable of being voted on such a resolution
confirm in writing that they would vote in favour of the waiver
were such a resolution to be put to the shareholders of the company
at a general meeting.
The Company has obtained such written confirmation from the
Majority Shareholders who are Independent Shareholders and the
Panel has accordingly waived the requirement for a resolution to be
put to a meeting of Independent Shareholders. Accordingly, the
Issue may be effected without the requirement for Zhongrun to make
a Rule 9 Offer.
Following completion of the Investment agreement, Zhongrun will
be interested in Ordinary Shares carrying more than 50 per cent. of
such rights and will be able to further increase its interest in
Ordinary Shares without being subject to the provisions of Rule 9
of the Code.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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